Interview with André Müller, Head of Business to Consumer International
André Müller has headed Business to Consumer International at Swiss Post International since 2002. His aim is to expand the leading position of Swiss Post International in the business-to-consumer segment and to grow along with the client base. The interview
took place on 24 September 2008.
“Growing with our clients”
Mr Müller, how has small goods dispatch developed in the last few years? We are currently experiencing rapid development with average growth of ten per cent per year in export from Switzerland. We have also been exporting significantly more goods in the last few years from European countries, where we have presence through our Group companies or franchise partners. Exports to Eastern European countries are growing the most rapidly. I believe this development will continue for the next few years.
To what do you attribute this development? The number of companies operating an online shop or going into direct sales is rising continually. It is also the case that more and more companies are entering new markets as their home markets become saturated. Internet sales in particular are strengthening cross-border trade. In future we will be supporting companies in some Southern and Eastern European countries like Italy and the Czech Republic in debt collection matters. We specialise in the cash on delivery service, where the recipient pays upon receipt and the supplier knows immediately that the shipment has been delivered.
What sort of goods do you send? We specialise globally in small goods dispatch of up to two kilograms and logistics solutions. Our cross-border B2C packages are also becoming increasingly popular. We mostly send books, CDs and DVDs, textiles, cosmetics and wine. There is also an emerging trend for dietary supplements, which are often ordered through the internet.
What is especially important in the business-to-consumer segment? Our customers value expert advice and a full service package, from collection of shipments to shipment preparation, transport, distribution, returns management and handling of VAT and customs issues. For companies exporting and importing goods outside the EU, customs and VAT services are particularly important. If a customs declaration is not filled out 100 per cent correctly, the goods are either not cleared at the border or very long delays occur. In Italy, Swiss Post offers pre-services like interim storage and fulfilment.
Even with internet orders, goods can be returned. What is Swiss Post International’s position on returns management? The number of returns is very varying. With textiles, for example, return rates are up to 50 per cent with customers deciding that clothes do not fit or are
not to their taste, whereas return rates for books ordered and paid for online are just one per cent on average. If returns are made from Switzerland to the EU, they are stored abroad and then sent back to Switzerland as a combined shipment. This saves on costs as it eliminates the need to clear each shipment through customs individually. For mail order sellers importing goods from further countries, i.e. outside the EU, with high customs costs, we can organise customs-free re-import to the EU for returns. A software-based return customs package ensures that customs fees paid are automatically reclaimed. This also gives the customer a cash flow benefit.
What other benefits do you offer your customers? With us the customer can receive all services from one source. Our advantage is that we take the time to give each customer an expert consultation service. Once we have done this, we offer them a package tailored to their needs, drawing from all product ranges. We can also support them in dialogue marketing if they entering into a new market, then take care of goods distribution and the subsequent mailing of invoices and latest offers.
What are the greatest challenges of the future? The greatest challenge is standardising the international distribution systems in the business-to-consumer segment, as the current structures are nearing their limit as the number of goods ordered increases throughout the world. We need to create an internationally standard system to simplify and accelerate goods traffic. The distance retail sector and logistics providers like Swiss Post International will also be developing IT solutions enabling optimal electronic data transfer in the B2C segment. This will mean, for example, that the most important information for dispatch will be transmitted to the logistics provider as soon as an internet order is received. This will result in a complete networking of the goods management system.
Will there be new services offered? Yes, in distance retail for example. Many new internet providers only have a virtual existence. They do not have their own production system, warehousing, post room or accounts department so all of these services are outsourced. Our service range will be expanded to cover this type of company, with the development of services like fulfilment. The customer can then come to us and say, collect the goods from there, deliver them to our customers and send us a bill. Companies can no longer and will no longer deal with these things themselves, so we handle all tasks as a full service provider, including services such as cash on delivery, which we will in future be offering in other countries.
Mr Müller, thank you for speaking to us
Contact: andre.mueller@swisspost.com